INTERNAL SOURCES OF FINANCE
Internal sources of finance are those that are created and used within a single organisation. Retained
profits, depreciation money, and working capital management techniques are some of these sources
(Woods, 2019). Profits that stay inside the business rather than being paid out as dividends to
shareholders are known as retained earnings. In order to replace or improve depreciating assets, an
organisation may set aside a percentage of its income as depreciation funds. Internal funds can also be
generated via effective working capital management practises, such as optimising inventory levels and
controlling accounts receivable and payable (Horne et al., 2020).